Conseco shares soar on hedge-fund investment

Indianapolis Business Journal – Wall Street loves Conseco Inc.’s deal to get a $278 million shot in the arm from a New York hedge fund.

Shares of the Carmel-based life insurer soared as much as 26 percent, to $6.30 apiece, in morning trading after New York-based Paulson & Co. agreed to buy $78 million in Conseco stock and $200 million in company bonds.

Paulson chief John Paulson is well-known today for betting in 2007 that subprime mortgages would plummet. According to Bloomberg News, his main fund returned 37 percent last year, compared with an average 19-percent loss for hedge funds. Now he’s betting on financial firms, including Bank of America Corp., Goldman Sachs Group Inc. and now Conseco, to come roaring out of the recession.